Shantanu Narayen, president and CEO, Adobe Systems, speaks during the launch of Adobe Creative Cloud and CS6 in San Francisco, April 23, 2012. Adobe is investigating claims of a zero-day PDF Reader exploit for sale.

Unfortunately for Mr Narayen, it was the worst possible time he could have jetted in.

To take the edge off how powerful the grilling of the Adobe CEO by journalists would be, the software firm announced on Wednesday (one day prior) it would be reducing the cost of its subscription-based “Creative Cloud” offering. It relies on month-by-month payments for access to Adobe software - a move away from the traditional one-time fee for its use that will make Adobe more money in the long term if customers continue to need access.

Shantanu Narayen

The price reduction also came two days after Parliament summonsed Adobe, Microsoft and Apple to appear before the federal IT pricing inquiry in Canberra on March 22. The three tech giants, among others, have been accused of stonewalling efforts by politicians to figure out why Australians pay so much more than Americans for identical technology products they sell.

While Adobe's goodwill gesture on subscription pricing will be appreciated by some, the fact is it didn't harmonise the cost of its traditional once-off fee software, which in at least one case is $1800 more expensive to purchase in Australia than in the US. Many people prefer this software because it means they get to keep it and never have to pay for its use again.

In defending the price disparity, Mr Narayen talked up the Adobe subscription service and its recent price reduction but refused to address the difference in cost for the once-off fee software.

He said subscriptions were the future of Adobe. But if that were truly the case, why didn't Mr Narayen make the decision to remove the once-off fee software from sale?

Because he doesn't have to. He runs a firm that does what's best for shareholders.

If Adobe can continue to bleed money from Australians who don't know better, then it will.

It's important to note that Adobe is not alone in gouging us: Microsoft and Apple do it too. An example of this is consumer group Choice discovering one Microsoft software development product that was more than $8500 cheaper in the US. Apple also charges more for many goods and services here in Australia when compared to its US prices.

The IT pricing inquiry by Parliament will help name and shame companies that gouge.

But if Adobe's stonewalling attempts in Parliament next month are as good as they were on Thursday with journalists - who are at times more annoying to argue with than politicians - then they'll continue to do what they do best, and gouge. Companies don't feel shame, and their CEOs, at least in Adobe's case, don't appear to be easily offended by the idea of it either.

Does this mean we need some sort of law to protect us from gouging? I'm unsure about that.

While I think what Parliament is doing is a good idea, it likely won't result in too much of a difference to prices charged by companies that are prepared to gouge. The government knows they don't have the power to regulate prices, but they are conducting the inquiry to draw public attention to gouging in the hope companies can be shamed into changing their ways.

The best thing Australians can do is show firms how they are able to vote with their feet and use other companies' goods or just import it from wherever they can find it cheaper.

As mentioned earlier, Adobe, Microsoft and Apple have been summonsed to appear before Parliament next month. Will their representatives answer questions politicians put to them? Probably not.

Words will come out of their mouths - but they won't be the words we're looking for.

We live in a global economy. Companies can no longer hide behind borders.

188 comments

The answer is to vote with your computer.The SMH can help by naming and shaming, BUT has to be on the front page to have any real impact.It is very easy to defeat geoblocking nowadays and buy overseas at their prices.Had a similar issue with Cyberlink, bought from Germany at the US price.Also had a very interesting email battle with them about differential pricing.Gerry

Commenter

Spud100

Location

North ROcks

Date and time

February 15, 2013, 12:26PM

And they wonder why people pirate copy their software???

reccommend using ip blocker and ordering as being based from US

Commenter

reefdog

Location

sydney

Date and time

February 15, 2013, 1:07PM

Given that I'm not interested in a physical box(I just wanted the serials) I've used services like HopShopGo to establish a legitimate virtual US address and pay US dollars for a US price. The serial is emailed and the software downloaded. This has been successful with Corel and I intend to do it with Adobe when the time comes. As long as the invoice is in my name, my accountant is happy.

It means letting go of my previous history with Adobe and reinventing myself as a new customer, but given that they will no longer let me upgrade from CS4 (I've been using them since Illustrator 4) that history is now a liability and I have zero incentive to play by their rules.

Commenter

Inkblot

Location

Canberra

Date and time

February 15, 2013, 1:34PM

ip blockerwhat a perfectly delicious idea what about the mailing address or is it a straight download

Commenter

Brenda Holmesby

Location

Chatswood

Date and time

February 15, 2013, 1:35PM

Better still, don't buy Adobe. Nitro 8 is a better product for a fraction of the price

Commenter

Splitpin

Date and time

February 15, 2013, 2:23PM

Software is one thing - why not have a go at Porsche pricing in Australia - it is cheaper to buy one in the UK, stay a year, ship it back to Aust, pay the gst and Luxury Car tax on the now 2'nd hand car and you have had a wonderful holiday and you are still end up ahead of buying one here !!

Commenter

ij

Location

Melbourne

Date and time

February 15, 2013, 3:19PM

One could add NOKIA to the list also. Their recently released LUMIA 920 flagship Windows 8 handset is sitting on Australian retail shelves at AUD$ 696. It started out life at Harvey Norman in Nov 2012 at AUD$829.

From the same release day in Nov, ATT (exclusive US distributor) has been selling the LUMIA 920 outright for USD$449.99. From Nov-end Jan, this included the wireless charging plate for free in the USA. February's current special ? Two (2) handsets for the price of one.

.. and Australians sit back and are 'happy' to pay extortionate prices? Nah, I would never believe that NOKIA or HN would take us to the cleaners. You might'nt be able to spend the airfare and get $600 change as in the Adobe example, but a flying visit to the USA will see you save half the cost of a cheap airfare on the NOKIA cell phone or more. No wonder Gerry wants the GST $1,000 limit reduced to $500.

Seems that the visit to Australia in the last couple of weeks by NOKIA's CEO might'nt have been to push Windows 8 and 'innovative' pricing for their market-challenged Australian list price.

Commenter

kimshep

Location

Sydney NSW

Date and time

February 15, 2013, 8:28PM

Inkblot alluded to a singularly relevant point about Adobe's upgrade policies. I used to be a huge fan of Adobes because their products were good, stable and they do offer good support, albeit 3rd world based. (They must actually train their customer service reps rather than just paying them $1/day. Though that having been said I've only ever needed to contact them about DRM problems....) They've probably been ripping off Australians compared to Americans since day 1 but I was unaware of it at the time. However their upgrade policies were extremely flexible; I went from using Photoshop CS2 to one of the CS3 creative suites and could have gone from that back to stand alone PS had I wanted to. NOW, however, they've changed policy so that since Dec 31 last year you can only upgrade from the most recent major package. Fail to, and you essentially need to purchase from scratch the next time around. Also (unless they've backed down on this) there's no more suite <-> single app upgrade path. (And the suites aren't always great value either; look at any which have RoboHelp in them. Rarely can you find a suite which has EXACTLY what you want.) Adobe has become a company which simply seems out to shaft its customers which brings one of Ben's comments sharply into focus:"Because he doesn't have to. He runs a firm that does what's best for shareholders."This is 100% correct, but the problem is that alienating customers is only going to reap short term rewards. Enjoy the gouging while it lasts Adobe, because in the long term, it'll kill the company.

Commenter

Sam Tyler

Location

Here and now

Date and time

February 16, 2013, 5:49AM

Split pin, you have to remember that it's also about industry standards and compatibility. Sure you can save in TIFF or JPEG formats, but what of your file is layered and the printer can only handle PSD files? Microsoft Office is less of a problem in this regard, but can be a hassle.

Me, I'd opt for the US holiday every one or two years and write it off as a business expense on my tax. I like the ip blocker idea too.

Commenter

YS

Date and time

February 16, 2013, 10:35AM

The government needs to use this idea as a threat to them. Make it illegal for Australian distributors to prevent importation, of the same products (even via geo-blocking). When they start losing their monopolies and actually have to compete on a worldwide market we'll see the prices drop.